Credit Union Mergers: Mismanaging A Fiduciary Trust

  In The Godfather Mergers series [link], we've been examining the predatory, fiduciary misconduct which is developing around credit union mergers.  

The chosen example has been the proposed SAFE/BECU merger in California to illustrate potential problems; but fiduciary malpractice in credit union mergers appears to be reaching pandemic proportions.

Let's look at yet another example of how financially unsound the credit union giveaway by the SAFE Board and CEO really is.  No one disputes that the SAFE Board and CEO are in effect "paying" somewhere between $400 to $800 million in member equity [see link above] for the "privilege" of merging with BECU. A "privilege"  that every SAFE member can obtain for free by simply joining BECU directly. In effect, the SAFE Board and CEO are forcing every SAFE member to pay @ $1,600 in cash/equity for the privilege of exporting their credit union service and control to Washington State.  

Another damning analysis of what the SAFE Board and CEO are giving away is the value of the member  relationships which SAFE as worked hard to build up over the years. In "marketing" terms these relationships are called "customer acquisition costs" (CAC). Companies literally spend millions on marketing to attract - and keep - customers, i.e. credit union members!

As you can see from the chart below, it costs @ $175 to attract a new member account. In the case of SAFE with 244,000 members, this means BECU is getting 244,000 new members for free! That's worth $175 x 244,000 = $42.7 million! "Privilege" has it's price, in this case "free"!!! 

 

😎 But it's worse than you think! The giveaway by the SAFE Board and CEO is much, much larger! While SAFE does have 244,000 members, it manages over 550.000 accounts of all types according to the NCUA. 

✔ Let's compute the real, total value of "CAC" giveaway by SAFE:  $175 x 550,000 accounts = $96.25 million!

 The SAFE Board and CEO find it very easy to give away "other peoples' money" (OPM) ... but heck, what's $100 million give-or-take among friends!

"NewNew" At SECU: The Second Coming.... Half-Ba(n)ked!!!

   

The Promises, Promises New/New Elixer

 ✅ Comment: Anonymous  March 9, 2026 at 4:14 PM

"A very major flaw in this thinking is the notion that you get to choose who you are competing against, when Fintechs, banks, and credit unions market to and come after our members to serve their financial needs on the very same products we offer. We lost 5 billion in deposits a few years back. Where do you suppose that went? If banks got their pro-rata market share they got a lot 3 billion of it. If we had said “hey members. FYI, we don’t compete with banks”. I guess we coulda kept the 3 billion. Is that how that works?

Otherwise just an intellectually lazy comment to say all bankers are poor communicators, or can’t understand a credit union model and mission"

  or later, or whenever! "We'll let you know what you need to know when you need to know.  [..'cause we really have no clue!] 

😎 4:14pm The problem with your analysis is you rarely get your facts right. SECU dropped the $5 billion because we were underpaying the members... SECU looked inept and cheap. Poor management, not a question of competitiveness.

Also seem to overlook that when SECU woke up and returned to paying fair rates, that $5 billion immediately came back. Or hadn't you noticed. If you hadn't noticed, see ""Poor management" above!

The $5 billion didn't come back due to any noticeable new tech or new services recently offered at SECU - nothing much new of note has happened in last 5 years. You're living off the "dinosaur" of which you complain; which is kinda like still living at home in the basement while criticizing your parents! 

Might be time to demonstrate to members there really is some substance to the "new/new"... talk is cheap. (see "Cheap" above as reference). What exactly is the"new/new" going to be whenever you get around to introducing it? 

A bit faster, a little more convenient... or something more substantive like better savings rates, lower loan rates?  What can we expect in the "new/new" afterlife? (that you've been working on for 5 years?) 

Hey, give us a hint... if you can! 

Two other points: 1) It's not the bankers who are failing to understand the credit union model and mission, and 2) there is a tremendous difference between "being competitive" and "competing with".

😎 Not convinced that you know "There is a difference" (see #1 &2)... actually pretty sure you don't... and no fintech or "half-ba(n)ked" vision is going to bail you out.

Bottom line: Not knowing what you're doing - and not knowing you don't ! - has a tendency to metastasize... rather quickly.